During a recent government meeting, city officials discussed the projected budget for the upcoming biennium, revealing a concerning financial outlook. The estimated revenue for the next two years is forecasted at $152 million, while expenditures are expected to reach $156 million, resulting in a projected deficit of $4 million. This shortfall is anticipated to be mitigated by drawing from the city’s fund balance and savings from the current year.

City officials acknowledged that the budget does not fully align revenues with expenditures, a practice that has been ongoing since the 2022 budget adoption. The discussion highlighted the necessity of maintaining compliance with the city’s fund balance policy, which requires a reserve equivalent to two and a half months of operating expenses. Failure to adhere to this policy could lead to future budgetary constraints, necessitating either cuts in expenditures or increases in revenue.

Council members expressed concerns about the implications of the budget shortfall, particularly in light of additional funding requests from various departments totaling approximately $3.3 million for the biennium. This figure does not include costs associated with mental health initiatives or additional maintenance workers aimed at addressing rampant graffiti in the city, which could further exacerbate the financial gap.

The meeting also touched on the potential for significant property tax increases, with projections indicating a rise of nearly 24% in 2025 and 30% in 2026 compared to 2024 assessments. Council members emphasized the importance of scrutinizing these figures, as they represent a substantial burden on residents.

Public comments during the meeting raised further concerns about the sustainability of funding for essential services, including police and lifeguard positions. Critics pointed out that reliance on one-time funding sources, such as the American Rescue Plan Act (ARPA), for ongoing positions could lead to future budgetary imbalances.

As the council prepares for further discussions and public hearings on the budget, the urgency for a balanced and sustainable financial strategy remains a pressing issue for city officials and residents alike.